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Crowdfunding calculator

Using crowdfunding successfully and profitably

Are you considering using crowdfunding to finance a planned project, be it a product or a service? Then you have come to the right place. The crowdfunding calculator will quickly and simply work out the expected profit or loss of your crowdfunding campaign. Why should I use the crowdfunding calculator? It is not as easy as it seems at first glance to calculate the expected profit or loss of a crowdfunding campaign in advance, but it is an essential step in avoiding any unpleasant surprises. Aside from fixed and variable costs, certain costs will only arise if specific intermediate stages are reached. Neglecting these probabilities can lead to losses, despite good planning otherwise. How does the crowdfunding calculator help me? The crowdfunding calculator helps you to plan your crowdfunding campaign by taking into account the probability of reaching specific intermediate stages, in addition to numerous possible costs. In addition, we provide data on real crowdfunding campaigns in order to draw relevant comparisons. The use of the crowdfunding calculator is free of charge, non-binding and the results can be viewed immediately. You can try out different amounts and see for yourself how the expected results change.

Will I achieve a profit or a make a loss with my crowdfunding campaign?

Are the set goals and expectations for my crowdfunding campaign realistic?

Are my projections comparable with results from real crowdfunding campaigns?

Partners

German Crowdsourcing Association e. V. (DCV)

Since its establishment in 2001, the German Crowdsourcing Association e. V. (DCV) has evolved into the leading centre of excellence for crowd-based business models in Germany. Thanks to the skills and abilities of its members, its national and international network and strong linkages with business, science and politics, the DCV has become the first port of call for all issues related to the crowd economy. Together with the German Crowdfunding Network working group, the Association represents the interests of all people and companies that deal with crowdfunding or offer related services.

Prof. Dr. Bernd Skiera

What is the crowdfunding calculator?Crowdfunding is up and coming. Platforms such as Kickstarter or Indiegogo are recording steadily increasing visitor numbers and more consumers are seizing the opportunity to support interesting project proposals and to receive products early and for a cheap price.For entrepreneurs, crowdfunding presents a very interesting new market, as at first glance it offers both new customers and also basic financing for the project. But a closer inspection also reveals great risks. The experiences of project initiators vary, since a capping can develop in different ways:1) the campaign does not reach its goal and therefore does not receive any financing. The project plan is not implemented and the project initiator bears the costs that have arisen;2) the campaign reaches its goal and the project plan is executed. The supporters do not receive the product or service, the project initiator only achieves a small profit or even suffers a loss due to underestimating the costs involved (e.g. Brooklyn Bridge).3) the campaign reaches its goal, but fails as a result of massive miscalculations regarding the implementation of the project plan. The supporters receive the product or service and the project initiator has to bear the costs and compensate his supporters (e.g. Coolest Cooler)Here the crowdfunding calculator comes into its own. It quickly and simple calculates if and when crowdfunding will pay off. After entering some basic information, you will immediately be able to assess whether a campaign is likely to be profitable for you or not. What is so special about the calculation of the profit or loss related to a crowdfunding campaign?Crowdfunding is based on an ‘all-or-nothing’ principle: the collected funds are only paid out if the campaign reaches or exceeds its target. However, only a third of all campaigns succeed in meeting this goal. The costs for preparation, as well as expenses related to the production of a video, are incurred regardless of whether the campaign goal is met. The risk of failing to gather any money while having to bear these costs is often ignored. And even a successful crowdfunding campaign is not a guarantee for achieving a profit. Miscalculations and incorrect estimates result in every tenth fully funded campaign still failing to deliver the promised product or service, since the funds raised prove to be insufficient and a loss arises. The crowdfunding calculator helps you to plan your crowdfunding campaign by taking into account the probability of reaching the campaign goal as well as the successful completion of production. The use of the crowdfunding calculator is free of charge and non-binding. There is no requirement for registration or login. You can easily send the summary provided at the end of the calculation process to an email address of your choice. We have scientifically developed the crowdfunding calculator, and it is based on proved calculation models. As a project initiator, you start by providing details about your planned campaign. You are likely to be able to provide some exact values, while you will need to estimate others. The model gives you all the necessary leeway. You can try out different values and see how these affect the overall result. We have made every effort in designing the crowdfunding calculator. Despite this, we cannot make any guarantees for the crowdfunding calculator.

How do I use the calculator? An example.An entrepreneur has long had an idea for a new type of fever thermometer that can be linked to a smartphone. Based on a comparison with similar products, he plans to sell the product for 250 euros a piece. He has already developed a partly functioning prototype, but requires 20,000 euros for the further development of the product. As a result, he is considering starting a crowdfunding campaign. However, he is unsure whether he can achieve a profit with his plans and therefore uses the crowdfunding calculator.Step 1:In order to compare his projected figures with the results from real crowdfunding campaigns, during the first step he chooses the platform (Kickstarter) and the category (technology) he plans to use for his crowdfunding campaign.

Step 2:As compensation for their financial contribution, he would like to offer the thermometer to supporters of the campaign for 100 euros (instead of the regular retail price of 250 euros), excluding shipping costs. As such, in order to reach his target of 20,000 euros, he needs to gain 200 supporters for the campaign.

Step 3:Since he has to send the thermometer to his supporters, he offers the option of shipping. He asks for an additional contribution of 10 euros per thermometer to cover the costs of packaging and shipping. He estimates that he will largely gain supporters nationally, with these making up 70% of all supporters. In order to cover his costs, he asks for 20 euros a piece from his international supporters, who make up the remaining 30% of supporters.

Step 4:In order to raise awareness of the campaign and to enable the visualization of the product, he would like to create a professional marketing video. He estimates that this will cost 500 euros. Since he requires a functional prototype for the video, he estimates that he will need around 750 euros for the further development of the product. Additional marketing materials such as posters and flyers to raise awareness of the campaign will cost 250 euros. The costs for use of the crowdfunding platform and the payment service provider to process all payments are dependent on the effectiveness of the campaign and will be shown as a percentage of the collected contributions. He estimates that these costs will be around 8% of the amassed capital.

Step 5:The variable costs (materials and assembly) of the production of the thermometer are estimated to be 50 euros per unit. In addition, he estimates 2000 euros of fixed costs for production, in order to acquire the necessary machinery and tools.

Step 6:The costs for shipping will be 10 euros domestically and 20 euros internationally. The packaging material will cost a total of 2000 euros, but there are no variable packaging costs.

Step 7:He assumes that quality control will not suffice in all cases and that 10% of thermometers will therefore be faulty and must be newly produced and shipped. In addition, he estimates a 30% chance of a 3-month delay in the production process. The additional communication costs would be 0.50 euros per supporter per month.

Step 8:He estimates a 50% chance of successfully reaching his campaign goal. Since there are often unexpected problems in the production process or the product possibly cannot be developed as planned, he estimates a 90% chance of successful completion of production.

Based on his expectations, by using the crowdfunding calculator he can see that his campaign is unlikely to be profitable and that he can expect a loss of 411.50 euros. A comparison with real crowdfunding campaigns shows that he has realistically estimated his chances of reaching his campaign goal and successful completion of production.However, the comparison also shows that he is offering only very few reward levels and is also offering his product too cheaply. With the aid of this insight, he can adjust his plans and increase the chances of successfully and profitably using crowdfunding.

Crowdfunding calculator

Introduction.Please calculate the expected profit or loss of your crowdfunding campaign on the basis of your planned figures.You are likely to be able to provide some exact values, while you will presumably need to estimate others. The model gives you all the necessary leeway. You can try out different values and see how these affect the overall result.For comparative purposes, we have provided the results of real crowdfunding campaigns. Please use these values to check how realistic your projections are.Note: all numbers must be entered in the format ‘2149.99’.

Step 1 - Platform and category

Details

Please choose which platform and which category you would like to use for your crowdfunding campaign.These details enable us to compare your figures with previous campaigns and to better plan your campaign.If you are not yet able or willing to provide details here, please choose ‘all platforms’ and/or ‘all categories’, which means that all categories and platforms will be illustrated in summary.

Please choose a platform:

[platformNotSupported]

Please choose a category:

Step 2 - Campaign goal and reward levels

Details

The campaign goal you choose represents the amount that you require in total to implement your project proposal and is to be gathered from supporters. Only those campaigns that meet or exceed this target are considered successful and will receive the pledged funds. If this threshold is not met or the project fails to materialize, every supporter will receive his or her money back.A typical campaign offers supporters different rewards in exchange for their financial support. For every reward level there is a fixed contribution or price, which is to be paid by the supporter. Aside from early-bird rewards with special or interesting conditions, there are often additional reward levels of high immaterial value (e.g. 1000 euros with a personal meeting).Many rewards must be shipped to supporters after the successful achievement of a campaign goal. This applies to physical deliveries (e.g. parcels) and digital deliveries (e.g. coupons). The expected number of supporters indicates how many people you expect to attract per reward level.The number of supporters multiplied by the contribution of the respective reward level amounts to the sum of the campaign goal.

How much money do you need?

Campaign goal

€

How do you want to reach the campaign goal?

Reward level

Contribution

Are you offering shipping?

Expected number of supporters

#PRODUCT_LEVEL_ID

€

#

The sum of the expected number of supporters multiplied by the contributions of the respective reward level must correspond to the campaign goal. Please adjust the expected number of supporters or the contributions for the reward levels.

Based on your information, the campaign goal is currently:

€

Please add the missing values. If a field is not relevant for your planning, please enter ‘0’.

Step 3 - Shipping contributionss

Details

If you are offering to ship rewards, it is possible to request an additional contribution from your supporters.For ease, we differentiate here between domestic and international shipping, and for each level there is an additional contribution to be paid by the supporter.The distribution of the shipping contributions indicates the expected distribution between international and national supporters.

Shipping costs

Shipping destination

Contribution

National/international distribution

National

€

100%

International

€

%

Since you are not offering shipping, you cannot request additional contributions from your supporters.

Please add the missing values. If a field is not relevant for your planning, please enter ‘0’.

Step 4 - Campaign costs

Details

Fixed campaign costs are independent of reaching the campaign goal and encompass all costs that are required to start the crowdfunding campaign. In addition to a marketing video, it is often expected that a functioning prototype is available. There may be additional costs for further services such as marketing materials.Variable campaign costs are only incurred if the campaign target is met and encompass the fees for the platform and payment service provider.

Fixed campaign costs

Name

Costs

Documents (e.g. photographs, videos)

€

Development (e.g. prototype)

€

Other (e.g. marketing materials)

€

Variable campaign costs

Fee

Costs

Payment service provider (percentage of the collected contributions)

0%

Platform (percentage of the collected contributions)

0%

Please add the missing values. If a field is not relevant for your planning, please enter ‘0’.

Step 5 - Development and production costs

Details

Fixed development and production costs encompass all costs that are required to start the production (e.g. acquisition of machinery or tools).Variable production costs of rewards include all costs of producing the respective rewards (unit costs).

Fixed development and production costs

Costs (total)

€

Variable production costs

Reward level

Costs (per unit)

#PRODUCT_VARIABLECOST_ID

€

Please add the missing values. If a field is not relevant for your planning, please enter ‘0’.

Step 6 - Shipping costs

Details

Variable shipping costs comprise the shipping and packaging costs per reward sent. In addition to postage, this includes the costs for packaging materials. Since external service providers are often used for shipping, additional costs such as flat fees often arise. Moreover, any charges from the external service provider for designing the packaging for the product should be included in these costs.

Fixed shipping costs

Costs (total)

€

Variable shipping and packaging costs

Reward level

Shipping costs - domestic

Shipping costs - international

Variable packaging costs

#DELIVERY_COST_ID

€

€

€

Since the rewards are not shipped, there are no costs incurred for shipping and no information can be provided here.

Please add the missing values. If a field is not relevant for your planning, please enter ‘0’.

Step 7 - Returns and delays

Details

The rate of returns and faults indicates the percentage of dispatched rewards that cannot be delivered or are returned, or are faulty and must be reproduced and resent, resulting in higher costs.Delays can occur in the development or production phases, resulting in greater administrative costs. These are calculated based on the duration of the delay and the number of supporters affected.

Returns and faults

Rate of returns and faults (percentage of all dispatched rewards)

0%

Delivery delays

Probability

Delay in months

Costs per supporter per month

0%

#

€

Please add the missing values. If a field is not relevant for your planning, please enter ‘0’.

Step 8 - probabilities

Details

Each campaign consists of different phases (financing, development and production) that need to be completed successfully and give rise to various costs. The percentages indicate the probability that individual phases can be completed successfully.

For this purpose, we would like to contact you within the next week by email with a short questionnaire.

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Expected result of your campaign

Taking into consideration all costs and probabilities, the following result is expected for your crowdfunding campaign:

:

€

The result relates only to the crowdfunding campaign itself. Positive effects from marketing or additional sales opportunities are not considered here.All details and calculations were provided according to our best knowledge and belief. We cannot make any guarantees for this offer and the calculation model and we thank you for your understanding.

Expected probability of success for your campaign

The following graphic illustrates how likely it is that you will reach your campaign goal. It also shows the probability that the production will be completed successfully, on the basis of the details provided and the structure of the expected result.

The following table places your details in relation to the average results of all campaigns in your chosen category. It is designed to help you assess how realistic your projections are.

Average campaign

Your campaign

Campaign goal (in €)

Number of supporters

Amount per supporter (in €)

Number of reward levels

Actual funding amounts per campaign

This graphic is designed to help you evaluate your campaign goal. As the majority of campaigns usually do not reach significantly more than their set campaign goal, this value should be chosen with great care.

Campaign goal (in €)

This graphic shows the actual financing amounts reached by all campaigns started on the platform Kickstarter between April 2012 and December 2015 in your chosen category. For a better comparison, the smallest and largest outliers (1%-level) were removed.

More facts about past campaigns

The following values are provided above all to help you prepare your campaign and to give you a sense for certain factors such as campaign duration and design.

Video

Share of campaigns with a campaign video.

Highlights

Share of campaigns in your category that were promoted through a recommendation from platform employees.

Duration

Days

Average duration of a campaign.

Delivery time

Days

Average promised delivery time in days following end of funding of a campaign.